Market Focus: Gulfstream GV

Overall, 2015 was a rough year for large-cabin markets. High inventory levels, huge price declines, and spotty liquidity plagued sellers. In our last market focus, we took a look at some building storm clouds in the Gulfstream 650 market (Read Here); this week, we’ll turn our attention to its older cousin- the Gulfstream V- for a bit of good news. Or at least news that passes for good news these days.

First some data. 194 Gulfstream V’s were produced with model years from 1995 through 2002. According to our tracking, there are currently 16 aircraft for sale- 8.3% of the active fleet- compared to 14 sales over the past 6 months. That’s 6.9 months of available inventory which is way below the 15+ month overall large-cabin average. In fact, by sales pace, the Gulfstream V was the absolute best performing large-cabin market in 2015.

Also noteworthy- In the 14 recent sales, we have examples of very high time aircraft; strange configurations; aircraft with heavy maintenance coming due; aircraft without an engine program; etc. Even a former B- registered aircraft that came back to the US. The Gulfstream V market has proved tolerant of imperfect aircraft in a way that other markets have not.

For us, this just says that liquidity produces liquidity. When the market can price an average plane efficiently, it can also price one with some differences.

Obviously, it also says there is real demand for aircraft with the Gulfstream V’s capability at these prices. To put things in perspective: the average age of Gulfstream V’s currently for sale is about 15 years and the average asking price is $12.5M. That’s well below 50% of what these aircraft sold for new and they still have half their useful life remaining.

None of this is to suggest it’s easy to sell a GV. The overall market direction is still down and there is plenty of inventory and pricing pressure coming from other markets. And the strong demand in 2015 came with falling prices. Our model shows average GV market values fell 13.4% in 2015. But believe it or not, that’s good news. If you own a Gulfstream 550, your aircraft likely lost 25% of its value in 2015- at a much higher basis.

Gulfstream V buyers will find several attractive aircraft for sale. There is a diverse field of configurations; pedigrees, and price points to choose from. Most aircraft (11 of 16) are US registered. There are even a handful of one owner, Fortune 500 examples.

We recently concluded the sale of a 1998 Gulfstream V. If you have any questions about the market, please give Cass or Jeff a call at +1 212 888 7979 or send us an email here.